By Ludwig Burger and Anirudh Saligrama
(Reuters) -Sanofi vaunted 12 drugs in development with the potential to make more than $1 billion in annual sales, but failed to reverse a recent plunge in its stock when it gave up a 2025 profit target.
After a 15% drop in Sanofi's stock on Oct. 27, when CEO Paul Hudson unexpectedly abandoned the targets to boost research and development (R&D) from next year, investors have been seeking clarity what the likely pay-off in new drug projects will be.
The 12 drug candidates include nine medicines and vaccines each with 2 billion euros to 5 billion euros ($2.2 billion to $5.4 billion) in peak sales potential, Sanofi said in a statement ahead of an R&D day for investors in New York on Thursday.
It also highlighted three pipeline products with a potential of more than 5 billion euros in peak sales thanks to their potential to treat several conditions.
After initial gains, the stock lost 1.1% at 1332 GMT. Fabian Wenner, wealth management analyst at Swiss bank Julius Baer, said markets were typically not swayed by longer-term sales projections.
Portfolio manager Markus Manns at Union Investment said he was missing a new margin target to replace the abandoned one.
"There was unfortunately no clarity on that," he said.
Hudson told a media call that the costs of running drug trials would rise by close to 700 million euros next year, and that longer-term levels could be up 1 billion euros over 2023 numbers.
R&D spend was 6.7 billion euros ($7.2 billion) in 2022 , which was 15.6% of group sales, or 17.6% when excluding non-prescription consumer products, below an industry average of around 20%.
The Paris-based drugmaker said it expected its recently launched and future pharmaceutical assets to generate more than 10 billion euros of annual sales by 2030.
Its top-selling anti-inflammatory drug Dupixent, which it hopes to use in treating chronic obstructive pulmonary disease (COPD), often known as "smoker's lung", is expected to deliver low double-digit annual sales growth up to 2030, it said.
The new guidance for the product, jointly developed with Regeneron, implied 2030 sales of about 22 billion euros, 2 billion above expectations, analysts at JP Morgan and Jefferies said.
Speaking in a call to journalists, CEO Hudson said he understood that the case for investing in Sanofi stock was a "show-me story".
"We have picked an area where we are a powerhouse - in immunology... but the only way for us to address (market) sentiment is by accumulating scientific successes," he added.
Sanofi added that two products with potentially more than 5 billion euros in annual sales are eczema drug amlitelimab, to build on the success of mega-blockbuster Dupixent, and frexalimab against multiple sclerosis, both to be tested in costly phase III trials from next year.
Sanofi said an early-stage experimental pill against psoriasis and other inflammatory conditions, part of a class of drugs known as tumour necrosis factor or TNF inhibitors, had the same commercial potential.
($1 = 0.9293 euros)
(Reporting by Anirudh Saligrama and Shivani Tanna in Bengaluru; Editing by Edmund Klamann, Mark Potter, Elaine Hardcastle)